Consider three imaginary countries. In Mainland, saving amounts to $4,000 and consumption amounts to $8,000; in Upland, saving amounts to $2,000 and consumption amounts to $15,000; and in Lowland, saving amounts to $6,000 and consumption amounts to $11,000. The saving rate is
A)higher in Mainland than in Lowland, and it is higher in Lowland than in Upland.
B)higher in Lowland than in Mainland, and it is higher in Mainland than in Upland.
C)higher in Lowland than in Upland, and it is the same in Upland and Mainland.
D)higher in Mainland than in Upland, and it is the same in Mainland and Lowland.

Question

Quizplus · Accepted Answer

Saving rate is calculated as saving divided by income (saving + consumption). 
- Mainland: Saving rate = 4000/(4000+8000) = 0.33
- Upland: Saving rate = 2000/(2000+15000) = 0.12
- Lowland: Saving rate = 6000/(6000+11000) = 0.35
Therefore, the saving rate is highest in Lowland, followed by Mainland, and lowest in Upland. Option B correctly states that the saving rate is higher in Lowland than in Mainland, and it is higher in Mainland than in Upland.

Consider Three Imaginary Countries